COMMISSIONER, DELHI VALUE ADDED TAX Vs. ABB LTD.
SUPREME COURT OF INDIA (FROM: DELHI)
Commissioner, Delhi Value Added Tax
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Shiva Kirti Singh, J. -
(1.) Instant appeals have been preferred by Commissioner, Delhi Value Added Tax to assail the judgment and order of the High Court of Delhi dated 28.09.2012 in S.T.A. Nos. 51 -70 of 2012. The High Court reversed the order of the VAT Tribunal and of other lower authorities on the basis of its conclusion that the inter -State movement of goods was in pursuance of and incidental to the contract for the supply of goods used in the execution of the works contract between the Respondent -Assessee and the Delhi Metro Railway Corporation Ltd. (hereinafter referred to as 'DMRC'). The High Court further came to hold that claimed sales should be deemed to have taken place in course of imports of the goods or inter -state trade and that such import/movement of goods was integrally connected with the contract for their supply to DMRC. On the basis of such twin findings the High Court has held that the transactions constituting inter -State trade and those constituting sale or purchase in the course of import were covered by Sec. 3(a) and Sec. 5(2) respectively of the Central Sales Tax Act, 1956 (hereinafter referred to as 'CST Act') and, therefore, exempt from taxation under the Delhi Value Added Tax Act, 2004 (hereinafter referred to as 'DVAT Act').
(2.) According to Appellant the impugned judgment and order of the High Court is based upon erroneous interpretation of judgments of this Court particularly that of the Constitution Bench in the case of M/s. K.G. Khosla and Co. v/s. Deputy Commissioner of Commercial Taxes, Madras : (1966) 3 SCR 352 : AIR 1966 SC 1216. The Appellant has placed strong reliance upon a subsequent Constitution Bench judgment in the case of M/s. Binani Bros. (P) Ltd. v/s. Union of India and Ors. : (1974) 1 SCC 459. On the other hand, Respondent has fully supported the view adopted by the High Court. Its contention is that ratio in the case of K.G. Khosla : (1966) 3 SCR 352 : AIR 1966 SC 1216 has not been doubted in the later judgment in the case of Binani Bros. and the conclusions drawn by the High Court on the basis of admitted facts are supported by the principle of law settled in the case of K.G. Khosla which has not been doubted in any other case. According to Respondent the claim of sale in course of imports occasioned by the contract was negatived in the case of Binani Bros. on peculiar facts of that case which were quite different from the facts of the instant case, as correctly noticed by the High Court.
(3.) Before adverting to the main issue as to whether the High Court judgment is correct in law as well as in facts or not, it would be appropriate to notice some of the relevant facts. The Respondent is a Public Limited Company engaged, inter alia, in manufacture and sale of engineering goods including power distribution system and SCADA system. It appears to be a market leader in power and automation technologies. It is a subsidiary of ABB Ltd., Zurich Switzerland which has operational presence in over 100 countries and employs around 1,30,000 personnel. On 15.05.2003 DMRC invited tenders for supply, installation, testing and commissioning of traction electrification, power supply, power distribution and SCADA system for Line 3 Barakhamba Road -Connaught Place -Dwarka Sec. of the DMRC. Respondent responded.;
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